The sanctions imposed by the US Department of Defense against Xiaomi have been lifted by a court with immediate effect – at least temporarily.

Because of alleged connections to the Chinese military, the US Department of Defense had Xiaomi under ex-President Donald Trump in January Blacklisted. This threatened the third largest cell phone manufacturer in the world restrictions on contacts with US companies.

Share slump after US sanctions against Xiaomi

Although the sanctions against Xiaomi are nowhere near as threatening for business as the trade embargo against Huawei passed in spring 2019, the share price fell by ten percent, Xiaomi co-founder Lei Jun lost – mathematically – 3.6 billion U.S. dollar. The company, which is listed on the Hong Kong Stock Exchange, has now lost almost a third of its market value. Xiaomi defended itself against the US decision in court.

With success. The responsible court in Washington has now suspended the restrictions on the Chinese tech group, initially temporarily. Xiaomi told Handelsblatt that the restrictions had “been lifted with immediate effect”. The decision of the US judge Rudolph Contreras is not yet final.

US security interests involved? Richter doubts

But: Contreras largely followed Xiaomi’s arguments and at least held out prospects that Xiaomi could soon be removed from the list. Because, according to the judge in the grounds of the judgment, the court was “a bit skeptical that weighty national security interests are actually involved here”.

Under the new US President Joe Biden, the US remains officially critical of China and possible threats to government-related companies. However, the Biden administration has now reversed some of the Trump administration’s decisions regarding Chinese companies, according to the Handelsblatt. For example, the impending bans on the Tiktok video platform and the Wechat messenger were suspended.

Tiktok sale to Walmart and Oracle postponed

The Bytedance subsidiary Tiktok was about to be sold to the US companies Walmart and Oracle. However, this has been postponed indefinitely. Bytedance had also defended itself against a corresponding order in court.

Also interesting: Xiaomi is planning European headquarters with hundreds of employees in Germany

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